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Trade-in-to-upgrade as a marketing strategy in disassembly-to-order systems at the edge of blockchain technology

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  • Özden Tozanlı
  • Elif Kongar
  • Surendra M. Gupta

Abstract

Growing environmental awareness and widening extended producer responsibility have heightened the need for economically, environmentally, and socially sustainable business strategies levered by digital technologies. As an extension, various take-back policies focusing on product waste and recovery are put in place by the high-tech manufacturing industry. With an attempt to increase sales while ensuring the environmental sustainability of products, trade-in programmes that incentivize consumers to exchange used goods for new and most recent technology products became a value-adding strategy for businesses. Due to the high unpredictability in the quality of returned devices however, determining trade-in margins is a challenging task for original equipment manufacturers (OEMs). This inevitably reveals the need for incorporating intelligent technologies into the formation of manufacturing and logistics architectures to simultaneously preserve OEMs profitability and ensure the sustainable development of the closed-loop supply chain activities. With this motivation, this study presents the use of IoT-embedded products in a blockchain-enabled disassembly-to-order system to determine the optimal trade-in-to-upgrade policy. A discrete-event simulation model is developed to obtain the expected cost of the disassembly-to-order system. Optimal incentives for varying product qualities are then computed by utilising this cost in the trade-in policy model.

Suggested Citation

  • Özden Tozanlı & Elif Kongar & Surendra M. Gupta, 2020. "Trade-in-to-upgrade as a marketing strategy in disassembly-to-order systems at the edge of blockchain technology," International Journal of Production Research, Taylor & Francis Journals, vol. 58(23), pages 7183-7200, December.
    • Handle: RePEc:taf:tprsxx:v:58:y:2020:i:23:p:7183-7200
    DOI: 10.1080/00207543.2020.1712489
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    Cited by:

    1. Vincenzo Varriale & Antonello Cammarano & Francesca Michelino & Mauro Caputo, 2021. "Sustainable Supply Chains with Blockchain, IoT and RFID: A Simulation on Order Management," Sustainability, MDPI, vol. 13(11), pages 1-23, June.
    2. Lai, Kee-hung & Feng, Yunting & Zhu, Qinghua, 2023. "Digital transformation for green supply chain innovation in manufacturing operations," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 175(C).
    3. Feng, Yunting & Lai, Kee-hung & Zhu, Qinghua, 2022. "Green supply chain innovation: Emergence, adoption, and challenges," International Journal of Production Economics, Elsevier, vol. 248(C).
    4. Susie Ruqun WU & Gabriela Shirkey & Ilke Celik & Changliang Shao & Jiquan Chen, 2022. "A Review on the Adoption of AI, BC, and IoT in Sustainability Research," Sustainability, MDPI, vol. 14(13), pages 1-25, June.
    5. Saumyaranjan Sahoo & Satish Kumar & Uthayasankar Sivarajah & Weng Marc Lim & J. Christopher Westland & Ashwani Kumar, 2024. "Blockchain for sustainable supply chain management: trends and ways forward," Electronic Commerce Research, Springer, vol. 24(3), pages 1563-1618, September.
    6. Gunasekara, Lahiru & Robb, David J. & Zhang, Abraham, 2023. "Used product acquisition, sorting and disposition for circular supply chains: Literature review and research directions," International Journal of Production Economics, Elsevier, vol. 260(C).
    7. Fuzhen Liu & Kee-hung Lai & Wei Cai, 2021. "Responsible Production for Sustainability: Concept Analysis and Bibliometric Review," Sustainability, MDPI, vol. 13(3), pages 1-27, January.
    8. Bai, Chunguang & Sarkis, Joseph, 2022. "A critical review of formal analytical modeling for blockchain technology in production, operations, and supply chains: Harnessing progress for future potential," International Journal of Production Economics, Elsevier, vol. 250(C).
    9. Wai Peng Wong & Muhammad Fahad Anwar & Keng Lin Soh, 2024. "Transportation 4.0 in supply chain management: State-of-the-art and future directions towards 5.0 in the transportation sector," Operations Management Research, Springer, vol. 17(2), pages 683-710, June.
    10. Ashish Dwivedi & Dindayal Agrawal & Sanjoy Kumar Paul & Saurabh Pratap, 2023. "Modeling the blockchain readiness challenges for product recovery system," Annals of Operations Research, Springer, vol. 327(1), pages 493-537, August.
    11. Muhammad Nazam & Muhammad Hashim & Florian Marcel Nută & Liming Yao & Muhammad Azam Zia & Muhammad Yousaf Malik & Muhammad Usman & Levente Dimen, 2022. "Devising a Mechanism for Analyzing the Barriers of Blockchain Adoption in the Textile Supply Chain: A Sustainable Business Perspective," Sustainability, MDPI, vol. 14(23), pages 1-31, December.
    12. Xu, Xiaoping & Yan, Luling & Choi, Tsan-Ming & Cheng, T.C.E., 2023. "When Is It Wise to Use Blockchain for Platform Operations with Remanufacturing?," European Journal of Operational Research, Elsevier, vol. 309(3), pages 1073-1090.
    13. Antonello Cammarano & Vincenzo Varriale & Francesca Michelino & Mauro Caputo, 2023. "Blockchain as enabling factor for implementing RFID and IoT technologies in VMI: a simulation on the Parmigiano Reggiano supply chain," Operations Management Research, Springer, vol. 16(2), pages 726-754, June.
    14. Choi, Tsan-Ming & Siqin, Tana, 2022. "Blockchain in logistics and production from Blockchain 1.0 to Blockchain 5.0: An intra-inter-organizational framework," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 160(C).
    15. Özden Tozanlı & Elif Kongar & Surendra M. Gupta, 2020. "Evaluation of Waste Electronic Product Trade-in Strategies in Predictive Twin Disassembly Systems in the Era of Blockchain," Sustainability, MDPI, vol. 12(13), pages 1-33, July.
    16. Qingyu Zhang & Salman Khan & Safeer Ullah Khan & Ikram Ullah Khan, 2023. "Understanding Blockchain Technology Adoption in Operation and Supply Chain Management of Pakistan: Extending UTAUT Model With Technology Readiness, Technology Affinity and Trust," SAGE Open, , vol. 13(4), pages 21582440231, October.
    17. Jaroslav Vrchota & Martin Pech & Ladislav Rolínek & Jiří Bednář, 2020. "Sustainability Outcomes of Green Processes in Relation to Industry 4.0 in Manufacturing: Systematic Review," Sustainability, MDPI, vol. 12(15), pages 1-47, July.
    18. Daniel Luiz de Mattos Nascimento & Diessica de Oliveira‐Dias & José Moyano‐Fuentes & Juan Manuel Maqueira Marín & Jose Arturo Garza‐Reyes, 2024. "Interrelationships between circular economy and Industry 4.0: A research agenda for sustainable supply chains," Business Strategy and the Environment, Wiley Blackwell, vol. 33(2), pages 575-596, February.
    19. Wang, Manman & Yang, Feng & Shan, Feifei & Guo, Yu, 2024. "Blockchain adoption for combating remanufacturing perceived risks in a reverse supply chain," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 183(C).
    20. Livio Cricelli & Serena Strazzullo, 2021. "The Economic Aspect of Digital Sustainability: A Systematic Review," Sustainability, MDPI, vol. 13(15), pages 1-15, July.
    21. Leng, Jiewu & Ruan, Guolei & Jiang, Pingyu & Xu, Kailin & Liu, Qiang & Zhou, Xueliang & Liu, Chao, 2020. "Blockchain-empowered sustainable manufacturing and product lifecycle management in industry 4.0: A survey," Renewable and Sustainable Energy Reviews, Elsevier, vol. 132(C).
    22. Xiaoxia Chen & Mélanie Despeisse & Björn Johansson, 2020. "Environmental Sustainability of Digitalization in Manufacturing: A Review," Sustainability, MDPI, vol. 12(24), pages 1-31, December.

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